Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why Under Armour Stock Fell Monday

By Daniel Sparks - Nov 4, 2019 at 12:05PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of the sports apparel company are down despite a strong third quarter. Here's why.

What happened

Shares of sports apparel specialist Under Armour ( UA 2.15% ) ( UAA 2.67% ) tumbled on Monday. As of 10:48 a.m. EST, the stock was down about 15%.

The decline came despite Under Armour reporting better-than-expected third-quarter earnings per share and revenue. The bearish sentiment was primarily due to the company's lowered full-year revenue outlook and news that Under Armour's accounting practices are under investigation by the Securities and Exchange Commission (SEC) and the Justice Department.

A chalkboard sketch of a chart showing a stock price moving lower.

Image source: Getty Images.

So what

Under Armour's third-quarter revenue fell 1% year over year to $1.43 billion. Its earnings per share for the period were $0.23, up from $0.17 in the year-ago period. Analysts, on average, were expecting revenue of $1.41 billion and earnings per share of $0.18.

Meanwhile, news broke that the company's accounting practices are being investigated. An Under Armour spokesperson confirmed in a statement to Reuters that this is the case. But the company asserted that "its accounting practices and disclosures were appropriate."

Now what

For the full year, Under Armour said it now expects revenue to rise 2% compared to 2018. Management had previously guided for 3% to 4% year-over-year revenue growth. The company cited several reasons for the lowered outlook, including the impact of foreign currency and "traffic and conversion challenges in direct-to-consumer."

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Under Armour, Inc. Stock Quote
Under Armour, Inc.
UAA
$23.50 (2.67%) $0.61
Under Armour, Inc. Stock Quote
Under Armour, Inc.
UA
$19.96 (2.15%) $0.42

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
634%
 
S&P 500 Returns
141%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/03/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.